This strategic plan is meant to discuss the reimplementation of Toll Brothers, Inc. For 2012. Toll Brothers, Inc. was founded in 1967 and quickly became the leader in luxury homes and land development. In 1986, the company went public with a public offering totaling $40 million. Toll Brothers is currently in 20 states and has acquired numerous building companies including the most recent acquisitions of Cam West and Gibraltar.
Statement of Forward-looking Information
Certain information included in this presentation is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, information related to: anticipated operating results; financial resources and condition; selling communities; home deliveries; average home prices; consumer demand and confidence; contract pricing; business and investment opportunities; and market and industry trends.
Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other Company reports, SEC filings, statements and presentations. These risks and uncertainties include, among others: local, regional, national and international economic conditions;
fluctuating consumer demand and confidence; interest and unemployment rates; changes in sales conditions, including home prices, in the markets where we build homes; the competitive environment in which we operate; the availability and cost of land for future growth; conditions that could result in inventory write-downs or write-downs associated with investments in unconsolidated entities; the ability to recover our deferred tax assets; the availability of capital; uncertainties in the capital and securities markets; liquidity in the credit markets; changes in tax laws and their interpretation; effects of governmental legislation and regulation; the outcome of various legal proceedings; the availability of adequate insurance at reasonable cost; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, the applicability and sufficiency of our insurance coverage; the ability of customers to obtain financing for the purchase of homes; the ability of home buyers to sell their existing homes; the ability of the participants in various joint ventures to honor their commitments; the availability and cost of labor and building and construction materials; the cost of raw materials; construction delays; domestic and international political events; and weather conditions.
Any or all of the forward-looking statements included in this presentation are not guarantees of future performance and may turn out to be inaccurate. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
1. Expand building in Western states including Northern Arizona, Western Colorado and Eastern Washington.
2. Increase profitability by 2%.
3. Develop 10 new building designs to expand the multifamily and high-rise business sectors.
2012 Functional Tactics
1. Expansion into the Northern Arizona through the acquisition and development of land surrounding the Flagstaff area. Western Colorado, especially the areas surrounding Arrowhead is promising for development as the area is already established as a luxury location. With the successful expansion into Seattle and the acquisition of Cam West, it is time to expand further into Eastern Washington including Snowhomish and Spokane.
2. With start-ups still on the decline throughout the country, Toll Brothers seeks to continue expansion through 2012 with a final revenue for the year projected at $1,771,200.
3. With single family residents decreasing and many families instead seeking multifamily units, Toll Brother will expand its high rise and multifamily unit options to include 4 new multifamily unit designs and 6 new high rise designs by the end of the 3rd quarter.
Action Items, Deadlines and Resource Allocation
1. Expansion land shall be acquired by the end of the 2nd quarter with an emphasis of maintaining primary purchases from bankruptcy auctions
. With advertising for this land starting simultaneously. The tasks of land expansion shall fall to the existing regional management. Funds for the purchase of land for development shall be allocated through securities.
2. Profit will be primarily generated through the acquisition of high rise and multifamily building buyers, as these markets are growing within the desired regions.
3. Design departments to be supervised by company managers and primary output completed by college interns to reduce the overhead cost of the designs and keep the company apprised of the most modern changes in luxury and building design.
1. Eric Campbell's roll as Seattle Division President will be expanded to include Eastern Washington's appraising and acquiring.
2. The Gibraltar project will expand the apartment redevelopment branch this year, as there is an increase in the amount of people seeking rental properties.
3. Toll Brothers will increase the amount of college graduates hired in 2012, as the entry level employees are more agreeable to current business conditions and will ensure an updated design portfolio.
2011 Key Success Factors
1. Expansion into Seattle
2. Purchase of 22nd Street in the Gramercy Park area of Manhattan
3. Increased presence in D.C., Boston and New York
4. Baby Boomer customers become highest for sales
2012 Comparative Budget
Cash and cash equivalents
Property, Construction and Office Equipment
Receivables, prepaid expenses and other assets
Mortgage loans held for sale
Mortgage loans held for sale
Income tax refund recoverable
LIABILITIES AND STOCKHOLDERS' EQUITY
Income taxes payable
Cost of revenues
Selling, general and administrative expenses
Loss from operations
(Loss) income from unconsolidated entities and nonperforming loan portfolio (b)
Interest and other
Expenses related to early retirement of debt
(Loss) income before income taxes
Income tax benefit
Net income (loss)
Income (loss) per share:
Weighted-average number of shares:
Risk Management Plan
I. Government Housing Interference
With the fate of Fanny Mae/Freddy Mack continuing to be uncertain, what does remain certain is that elected officials are still involving themselves in the housing market. This crises is sure to only get worse under the current administration, resulting in greater spending and less fluent assets within the industry. To avoid this issue, Toll Brothers will continue the commitment to targeting empty nester and active adults for luxury housing. Currently less than $200,000 of current purchases result from lenders. Most homes are purchased with cash. This ensures flexability for Toll Brothers as well as reliability of the customer.
II. Stock Market Instability
The stock market is girating in historic ways. The moment anyone mentions another bailout or bankruptcy of a bank, the housing market's stock goes down. In order to better ensure reliable stock for Toll Brothers, the company will continue growing its credit rating. According to the S&P report, Toll Brother's has a current rating of stable but is still considered a significant financial risk. To better grow the company and have greater stock stability, Toll Brothers will make every attempt to improve the credit rating and achieve the status of modest with regard to risk in the housing industry.
III. Budget Impasse
It cannot be denied that Toll Brother's annual profit has shown steady decline for the past 5 years. Last year, however, the market slowed with a loss of 2%. In order to further mitigate losses in the next year and ideally surpass the budgeted goals…